Rocket Fuel: A Lesson In IPO Wordplay

The company's liberal use of the phrase of 'Big Data' probably isn't unintentional

When a company writes an S-1, a big focus is on the marketing angle because how the messaging hooks investors is crucial.

And amid a slew of ad-tech operators, we just got an interesting example of the kind of tactics companies use.

During the past few months, two companies in the space have pulled off their IPOs: YuMe (YUME) and Tremor Video (TRMR). Both are in the red since going public, and a small reason for that might be found in their S-1s, where there’s a heavy focus on their roles as ad networks — a place where Google (GOOG) and Yahoo (YHOO) play, where margins can be thin, and where the technology can be tough to differentiate.

So here’s how YuMe describes its platform:

“Our proprietary technologies serve the specific needs of brand advertisers and enable them to find and target large, brand-receptive audiences across a wide range of Internet-connected devices and digital media properties.”

When you cut through some of the buzzwords and verbiage, they both describe ad networks — they process information and deliver ads across a network.

So when another player in the space, Rocket Fuel, recently filed its S-1, it was funny to see it took a different tack in its opening:

“(We are) a technology company that has developed an Artificial Intelligence and Big Data-driven predictive modeling and automated decision-making platform.”

No mention of “ad” or “advertiser,” so it certainly doesn’t sound like it’s trying to hammer home the point that it’s an ad network.

Also of note, the company did throw in the a mention of “Big Data” up front, and peppered that in 15 times throughout the S-1, vs. one instance for YuMe and none for Tremor. Funny that … Big Data has been red-hot in the IPO market. For instance, Splunk (SPLK) is up more than 70% year-to-date, and Tableau Software (DATA) has more than doubled from its IPO price of $31.

None of this is to say that Rocket Fuel’s word play will make an enormous difference, as IPO investors can be discerning.

But when it comes to pitching a deal, the message is crucial — and Rocket Fuel appears to get it.

Based in Silicon Valley, Tom Taulli is in the heart of IPO land. On a regular basis, he talks with many of the top tech CEOs and founders trying to find the next hot deals and finding out which start-ups are stinkers.

A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.

Tom is routinely quoted in the media about upcoming deals with his interviews on CNBC and Bloomberg TV, but he is eager to take your questions too. You can message him on Twitter at @ttaulli. And feel free to weigh in via the comments section on any of his IPO Playbook posts.